A Fair Performance Review Process is …

People Don’t Want to Be Compared with Others in Performance Reviews. They Want to Be Compared with Themselves.

That’s the title of a recent article in Harvard Business Review. The key point of the article is that when an employee’s past performance is compared with his/her current performance, the employee tends to see the comparison as fair and is more likely to accept it. But when an employee’s current performance is compared with the performance of others, the employee tends to see the comparison as unfair and is less likely to accept it. Fairness is the issue.

It’s easy to see why. Comparisons with others – either directly or through rating processes like forced ranking or differentiation – tend to be murky and often seem arbitrary and unfair. It can be difficult to find significant differences in performance among most employees. And sometimes these comparisons are connected more to compensation decisions than performance assessment.

All that said, it’s difficult to understand how the proposed solution would work for assessing current on-the-job performance. Having employees use themselves as the point of comparison works well for a development discussion. But, as Carol Dweck illustrates in a very different context, development and evaluation are not the same.

Performance Assessment

To assess performance, people usually compare current performance with performance expectations. It’s not clear why the authors have not suggested that. Or why they didn’t propose eliminating forced ranking and/or ratings. Many companies have done that.

Instead the authors of the article propose that the employee’s past performance should be the criterion against which to measure current performance. That means that two people with the same job could be assessed against different criteria. And the relationship of those criteria to whatever outcomes the organization needs might be tenuous.

One of the current reasons for changing performance reviews is that employees – and presumably their managers – want more regular discussions about their performance: what’s working; what needs to get better. It should be unnecessary to say this, but managers can have performance discussions with their employees any time during the year. They don’t have to wait for the annual discussion.

Still, the perception exists that annual performance reviews are some sort of brake on regular discussions. They’re not. And having those discussions on a regular basis can increase employee perceptions of fairness. That’s because the employee has an opportunity to hear the manager’s perspective and to make mutually agreed upon course corrections during the year.

A Broader View

It’s important to remember that performance reviews serve the organization as well as the employee. They provide documentation that supports various personnel actions – promotions, termination, disciplinary actions, compensation decisions, etc. And the information is then fed into the talent management system as part of the information for establishing talent pools, succession planning, etc. Employees are not necessarily aware of much of this. But that doesn’t mean the function is not important.

A Fair Process

“… employees perceive the fairness of evaluation processes when they feel included and respected. They also consider it fair when their evaluations are accurate and are conducted based on ethical and moral principles.”

All employees deserve as fair a performance review process as possible. And perhaps at a future date, the authors of the HBR article will propose one. In the mean-time, it seems to me that a fair process would be one in which the employee and manager had enough discussions about performance that the performance review was nothing more than a confirmation of those discussions. No drama. No surprises.

That doesn’t require a special skill. All it requires is regular performance management meetings which address employee performance in relation to expectations, encourage employee input into this process, and provide support for development.

Your Takeaway:

Using past performance as the criterion for evaluating current performance is inadequate at best.

Assessing performance usually involves comparing current performance to some set of previously established performance expectations. The manager usually sets expectations, sometimes in collaboration with the employee.

To have a fair performance review process have regular performance management discussions that address the employee’s performance in relation to expectations, encourage employee input, and provide support for development.